RBC’s Unfair Investigation Leads to Multi-Million Dollar Wrongful Dismissal Award

Introduction

In Silva v. Royal Bank of Canada, 2026 ONSC 3841, the Ontario Superior Court found that RBC had wrongfully dismissed a highly successful financial planner for cause after conducting an investigation that was neither impartial nor fair. ¹

Justice Casullo concluded that the investigation was affected by tunnel vision, confirmation bias, undisclosed conflicts and a predetermined desire to find grounds to dismiss the employee. Instead of conducting a balanced search for the truth, RBC engaged in what the court described as “ammunition gathering.”

The consequences were extraordinary. The court awarded Ravini Silva 16 months’ reasonable notice, almost $1.92 million for loss of earning capacity, $150,000 in aggravated damages and a substantial punitive damages award. Royal Mutual Funds Inc. was also ordered to correct the regulatory notice that had effectively prevented Silva from returning to the financial-services industry.

The decision provides a powerful warning that a workplace investigation cannot be used as a mechanism to justify a termination decision that management has already made.

The Employee’s Successful Career

Silva began working for RBC in 2006 and was promoted to financial planner in 2010. She was 47 years old when dismissed and had almost 12 years of service.

She had been an exceptionally successful employee. She developed a large and loyal client base, consistently met her performance objectives and received highly favourable performance reviews.

In 2015 and 2016, Silva was ranked as the number-one financial planner in the Greater Toronto Area and third nationally. She received RBC’s Convention Winner Award for exceptional performance.

Her client portfolio was valued at approximately $150 million.

The relationship with management began to deteriorate after Silva transferred from Ajax to Richmond Hill. RBC wanted many of her Ajax clients transferred to other financial planners. The transfer was implemented abruptly and without Silva’s involvement.

The plan backfired. Many clients refused to work with the replacement planner and demanded to be returned to Silva. Approximately 50 clients were ultimately restored to her portfolio.

The court found that this was a significant loss of face for management and marked the beginning of an increasingly hostile relationship.

Compensation Disputes and the Retaliation Complaint

Silva subsequently challenged several compensation decisions and repeatedly used RBC’s escalation process to pursue amounts she believed were owing.

Management became frustrated by these escalations. Although Silva continued to meet her business objectives, she began receiving “Does Not Meet” performance ratings based largely on her attitude, conduct and continued challenges to management decisions.

Silva complained that the ratings were retaliatory. She eventually retained legal counsel, who submitted a detailed complaint alleging workplace harassment, unjust treatment and retaliation.

A central problem identified by the court was the role played by RBC employee-relations adviser Doug Berry.

Berry had advised Silva’s managers on disciplinary and performance issues. He drafted a formal warning issued to Silva and coached management on how to respond to her conduct.

At the same time, Berry became the employee-relations representative assigned to receive and supposedly assist with Silva’s complaints against those same managers.

Justice Casullo found that Berry was “working both sides” of the conflict. He was involved in managing Silva’s complaint while simultaneously coaching the managers accused of retaliating against her.

Silva was not informed of this conflict.

The court found no evidence that RBC took meaningful steps to investigate her retaliation complaint. Berry eventually dismissed the complaint as unsupported but did not provide the detailed reasons or investigation materials said to support that conclusion.

The Investigation Begins

The investigation that ultimately led to Silva’s dismissal began when another employee processed several transactions for clients assigned to Silva.

That employee had processed 11 transactions and had received compensation credit for some of them. RBC concluded that he had breached its telephone, fax and email procedures and had received compensation to which he was not entitled.

He received a final written warning. His compensation was clawed back, but he was not dismissed.

The evidence initially identified little, if any, misconduct by Silva. There was no suggestion of theft, fraud, insider trading, client loss or unauthorized transactions.

Nevertheless, management immediately requested an urgent investigation of Silva.

The original investigation soon expanded beyond the transactions that had triggered it. Management asked investigators to review Silva’s emails and electronic communications for “incriminating” material.

The investigator was also asked to determine whether Silva was communicating with a former manager who might be advising her. That issue had nothing to do with the transactions under investigation.

Justice Casullo rejected the investigator’s attempt to minimize the significance of the word “incriminating.” The court found that RBC was actively looking for something it could use against Silva.

The Failure to Investigate Fairly

Justice Casullo relied upon Porta v. Weyerhaeuser Canada Ltd., 2001 BCSC 1480, as a leading authority on workplace investigations.

In Porta, the court held that an employer must conduct a thorough, fair and contextual investigation. The employer must consider all sides of the story and gather the relevant information before reaching a conclusion.

The judge also referred to Arora v. ICICI Bank of Canada, 2024 ONSC 4115. Arora confirms that an employer’s investigation need not be perfect. The applicable standard is one of adequacy.

A minor investigative error will not necessarily invalidate a dismissal. The problem in Silva, however, was not a minor mistake. The investigation displayed virtually every characteristic of an unfair process.

Justice Casullo identified examples of an inadequate investigation as including:

• tunnel vision;
• prejudgment;
• confirmation bias;
• failure to document evidence favourable to the employee;
• actively discounting the employee’s explanations;
• failure to provide specific particulars of the allegations;
• denial of a meaningful opportunity to respond; and
• an investigation conducted to justify a predetermined decision.

These concerns were all present in RBC’s process.

Inadequate Notice of the Allegations

Silva was initially told that Corporate Investigation Services wanted to interview her, but she was not told what the interview concerned.

When Silva telephoned her manager in distress, the manager claimed not to know why investigators wished to meet with her. The court found that statement was patently false. The manager had been actively involved in the investigation and knew precisely what was being examined.

Although the interview was postponed more than once, RBC still did not provide Silva with the allegations in advance.

A summary of the proposed questions was finally given to her on the morning of the interview.

Justice Casullo found that the deliberate withholding of information suggested that the objective was not neutral fact-finding. It appeared designed to compromise Silva’s ability to respond during the interview.

An employee cannot meaningfully answer allegations involving numerous transactions over several months without being told in advance which transactions, policies and documents are in issue.

Denial of Access to Relevant Records

Silva asked for access to her computer, calendar, diary and electronic notes during the interview.

Her request was refused.

Those records could have helped her determine where she was working on particular days, what discussions she had with clients and whether the required documents had been received.

RBC later relied upon Silva’s inability to recall or document the transactions as evidence against her.

The employer had therefore denied her access to the very records that could have provided an explanation and then relied upon the absence of an explanation to support its findings.

Failure to Interview the Clients

RBC alleged that Silva had processed transactions before receiving proper evidence of client authorization.

The most obvious investigatory step was to ask the clients whether they had authorized the transactions and what documents they had provided.

No one contacted them.

The investigators did not speak to the affected clients, even though their evidence could have confirmed or contradicted Silva’s explanations.

RBC suggested that clients might not remember transactions that had occurred three to six months earlier. The court found this reasoning unpersuasive, particularly because RBC expected Silva to remember the same transactions while managing hundreds of client matters.

The clients were eventually contacted more than seven years later in preparation for trial. Their evidence supported Silva.

The court found that the transactions had been authorized and that the relevant written evidence had likely existed.

Failure to Preserve and Obtain Documents

RBC also failed to obtain potentially important documents that remained available within its branches and computer systems.

The investigators did not retrieve:

• Silva’s calendars and diaries;
• sales-platform notes;
• non-standard authorization forms;
• branch records;
• documents retained in transaction-validation queues; or
• information from employees responsible for checking transaction documentation.

Justice Casullo found that a genuine investigation would have attempted to gather these materials.

Instead, RBC relied heavily upon gaps in its own records and treated those gaps as evidence of Silva’s wrongdoing.

No Written Response or Meaningful Follow-Up

RBC had initially contemplated asking Silva to provide a written statement following her interview.

It did not do so.

There was no meaningful follow-up interview. Silva was not asked to locate additional documents or respond to the investigators’ conclusions.

She returned to work after the interview without restrictions and was not told that she was continuing to engage in practices RBC considered improper.

The investigation report was not provided to her before dismissal.

She was therefore dismissed without ever receiving a fair opportunity to review and answer the findings relied upon to establish cause.

Management’s Control of the Investigation

Another serious problem was the involvement of the managers against whom Silva had made her retaliation complaint.

Those managers communicated directly with investigators, expanded the scope of the inquiry and requested searches for incriminating communications.

The investigator responsible for the corporate investigation was not told that one of the managers directing the investigation was the subject of Silva’s retaliation complaint.

Justice Casullo found that the investigation was being driven by management rather than by investigatory rigour.

The court stated:

“I find CIS’s investigation fell woefully short of being thorough, fair, and contextual. Instead it lacked impartiality and was deeply flawed. In place of a balanced exercise, CIS’s investigation was more a form of ammunition gathering.”

The Compliance Investigation

The parallel compliance investigation was also criticized.

The senior manager conducting it had been employed by Royal Mutual Funds for only a few days. She had not completed her training and was not yet familiar with RBC’s business practices or procedures.

She nevertheless concluded that Silva’s conduct was potentially reportable as theft, fraud or serious misconduct.

Before making the regulatory report, she had not:

• interviewed Silva;
• contacted the affected clients;
• searched for missing documents;
• reviewed relevant sales-platform notes; or
• obtained clarification from branch employees.

Silva’s explanations were either omitted or incompletely recorded in the regulatory filings.

The court found that the compliance investigation was overreaching and that its conclusions were wrong.

The Alleged Misconduct

RBC eventually relied upon three categories of alleged misconduct:

1. Silva had forwarded two emails containing confidential information to her personal email account.
2. She had processed two transactions without first obtaining proper evidence of authorization.
3. She had asked clients to date replacement documents with the date on which the original documents had been signed.

The court found that none justified dismissal.

The emails had been sent for legitimate work purposes so that Silva could print documents for client meetings. They were not shared with anyone, were deleted and caused no loss or harm. Although sending them may technically have violated policy, the incidents were isolated and described by the court as trivial.

The transactions had been authorized by the clients. RBC’s inability to locate the supporting records was largely a consequence of its own failure to collect and preserve the relevant documents.

The alleged backdating involved replacing documents that had been lost or incorrectly scanned. The clients were asked to use the date on which the original document had been signed. The evidence demonstrated that other RBC employees had followed the same procedure and that there was no clearly identified policy prohibiting it.

The national regulator later characterized Silva’s regulatory breaches as minor and issued only a cautionary letter.

The Legal Test for Cause

Justice Casullo applied the contextual and proportionality analysis established in McKinley v. BC Tel, 2001 SCC 38.

Under McKinley, proof of some misconduct does not automatically establish just cause. The court must determine whether the misconduct, viewed in context, was sufficiently serious to destroy the employment relationship.

The judge also relied upon Render v. ThyssenKrupp Elevator (Canada) Limited, 2022 ONCA 512, for the proposition that the employer bears a high and onerous burden. Breaking a rule or performing poorly will not necessarily amount to cause.

In Stone v. SDS Kerr Beavers Dental, 2006 CanLII 21073, affirmed 2007 ONCA 543, the court held that an employer should consider alternatives such as coaching, verbal warnings, written warnings and performance-improvement plans.

Justice Casullo also referred to Carscallen v. FRI Corporation, 2005 CanLII 20815, affirmed 2006 CanLII 31723, which described dismissal for cause as the “capital punishment” of employment law.

RBC relied upon Steel v. Coast Capital Savings Credit Union, 2015 BCCA 127. In that case, an employee with privileged access deliberately entered a manager’s confidential electronic folder without permission. The conduct was dishonest and destroyed the necessary trust.

Justice Casullo distinguished Steel. Silva had not acted dishonestly or deceptively. Her conduct did not approach the level of misconduct found in that case.

The court concluded that RBC had not established conduct fundamentally incompatible with Silva’s employment.

If management found her difficult or no longer wished to employ her, RBC could have managed her performance or terminated her without cause and paid reasonable notice.

Instead:

“RBC went nuclear, looking for infractions and manufacturing violations where none existed, ultimately dismissing Ms. Silva for cause.”

Reasonable Notice

The court applied the principles from Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986, and the familiar factors from Bardal v. Globe & Mail Ltd. (1960), 24 D.L.R. (2d) 140.

Silva was 47, had almost 12 years of service and had spent her career in banking and financial services.

The court awarded 16 months’ reasonable notice, valued at $313,333. That amount was subject to adjustments for pension contributions, share-plan contributions, benefits and mitigation income.

Loss of Earning Capacity

The most substantial award was $1,919,272 for loss of earning capacity.

Royal Mutual Funds had filed a regulatory Notice of Termination stating that Silva had been dismissed for cause and had repeatedly or materially failed to comply with regulatory requirements.

The evidence showed that this filing prevented her from returning to the financial-services industry.

TD hired Silva but dismissed her after learning of the cause designation. Other financial institutions and recruiters testified that they would not proceed with her candidacy because of the regulatory filing.

The court relied upon Ojanen v. Acumen Law Corporation, 2021 BCCA 189. In Ojanen, an articling student received damages after unfounded allegations delayed her entry into the legal profession.

Justice Casullo found the cases analogous. Silva had no reasonable prospect of returning to financial planning while the regulatory allegations remained on her record.

The court calculated the loss on the basis that it could take Silva until age 60 to obtain employment, rebuild a client portfolio and re-establish herself in the industry.

Aggravated Damages

Silva was awarded $150,000 in aggravated damages.

Justice Casullo relied upon Honda Canada Inc. v. Keays, 2008 SCC 39, and Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419.

These cases establish that aggravated damages may be awarded where the employer acts unfairly or in bad faith in the manner of dismissal and causes compensable mental distress beyond the ordinary upset associated with losing a job.

The court also referred to Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26, and Doyle v. Zochem Inc., 2017 ONCA 130. Pre-termination and post-termination conduct may be considered where it forms part of the manner of dismissal.

There was medical and family evidence that Silva suffered serious depression, anxiety and emotional harm. The consequences went well beyond normal hurt feelings.

The unfair investigation, unsupported allegation of cause and career-ending regulatory filing all contributed to that harm.

Punitive Damages

The court found RBC’s conduct sufficiently reprehensible to justify punitive damages.

Justice Casullo relied upon Whiten v. Pilot Insurance Co., 2002 SCC 18, the leading Supreme Court of Canada decision on punitive damages.

The court also referred to Humphrey v. Mene Inc., 2022 ONCA 531, and Boucher. Punitive damages are exceptional and are intended to punish malicious or outrageous conduct and to achieve denunciation, deterrence and retribution.

Justice Casullo found that:

• management wanted Silva removed;
• RBC was not honest about the real reasons for dismissal;
• the investigation yielded to confirmation bias;
• a manager’s motivation became vindictive after the retaliation complaint;
• Berry was working both sides of the conflict;
• Silva was ambushed;
• relevant explanations were not pursued; and
• RBC acted with little regard for the foreseeable destruction of Silva’s career.

At paragraph 427, the court awarded $250,000 in punitive damages. The concluding paragraph, however, lists punitive damages of $150,000. This apparent $100,000 inconsistency may require correction or clarification.

Correction of the Regulatory Notice

The court ordered Royal Mutual Funds to file a correction confirming that RBC did not have cause to dismiss Silva.

Justice Casullo remained seized of the issue in case the parties could not agree upon the wording.

Although the court rejected Silva’s separate defamation claim, it found that the regulatory notice was now demonstrably incorrect and had caused her substantial economic harm.

Lessons for Workplace Investigations

Silva does not establish that every imperfection in an investigation will expose an employer to aggravated or punitive damages.

The investigation need not be perfect. It must, however, be adequate, impartial and genuinely directed toward determining what happened.

The decision identifies several essential requirements of a fair investigation.

The employer should appoint an investigator who is independent of the underlying conflict. A person who has advised one side should not simultaneously investigate a complaint against that side.

The allegations should be clearly particularized and provided sufficiently in advance to allow the employee to prepare.

The employee must be given access to records reasonably required to respond.

Relevant witnesses should be interviewed, including witnesses who may provide evidence favourable to the employee.

The investigator must gather exculpatory as well as inculpatory evidence.

The investigation mandate should be clearly defined. It should not expand into a general search for anything that might justify termination.

The employee’s explanations should be accurately documented and meaningfully assessed.

Management should not direct investigators to look for “incriminating” information against an employee who has recently made a retaliation complaint.

Finally, the employer must distinguish between misconduct that warrants coaching or progressive discipline and conduct sufficiently serious to destroy the employment relationship.

Conclusion

Silva is an exceptional case, but its central lesson is straightforward.

An investigation must be a search for the truth, not a search for cause.

RBC’s process failed because the investigators did not fairly test the allegations, did not gather readily available evidence, did not give Silva a meaningful opportunity to respond and permitted interested managers to direct the inquiry.

Once the investigation became a means of gathering ammunition against Silva, the resulting findings could no longer safely support dismissal for cause.

The court’s multi-million-dollar award demonstrates the potential consequences where an unfair investigation does more than lead to termination and instead destroys the employee’s professional reputation, regulatory standing and future earning capacity.

1. case not yet on Canlii. PDF is linked